MoviePass boosts its stock with a reverse split -- and immediately plunges 50%

This isn't how they drew it up.

One day after the parent company of MoviePass announced a drastic effort to boost its stock price from 8 cents to $21, the price of the stock immediately tanked.

Shares of Helios and Matheson(HMNY) started plunging as soon as the market opened Wednesday. The price eventually closed at $10.60 per share, a drop of more than 50%.

The company on Tuesday said it would approve a 250-for-1 reverse stock split, an attempt to keep it from falling off the Nasdaq stock exchange. Investors have grave doubts about the viability of its signature product MoviePass, the service that lets you see a movie every day for $10 a month.

The reverse split was a largely cosmetic change for shareholders, since their stakes are valued the same afterward. But because the price was so cheap, the stock was in danger of being delisted from the Nasdaq stock exchange.

In an interview with CNNMoney earlier this month, CEO Ted Farnsworth said his company has been "talking to several" of its institutional investors about providing additional money. Farnsworth said at the time that there is "no shortage" of investors.

Helios and Matheson was trading at an all-time high of nearly $39 per share last October (after the reverse split, it was trading at over $9,700). That's around when the company announced that it was dropping the cost of MoviePass to $10 a month.

Since then, analysts have worried about the company's sustainability when the price of its flagship product is so low.

Farnsworth has said the company expects to reach profitability by the end of this year, largely because of subscriber growth. He expects to have signed up about 5 million people by that time.

Helios and Matheson is also trying to boost revenue and awareness in a few other ways. It created a division called MoviePass Ventures, which has been investing in independent films that it can promote to subscribers.

MoviePass also recently introduced surge pricing, which triggers an added cost for a particular showing whenever there is a lot of demand.